IMF: Ukraine Growth Forecast ‘Dented’ By Ongoing War, Strikes on Energy Infrastructure

The International Monetary Fund (IMF) confirmed that its growth projections for Ukraine “have indeed been dented” by Russia’s continued attacks on energy infrastructure and civilian targets – putting Ukraine’s real GDP growth at 2% for 2025 and 4.5% for 2026. 

The figures are broadly in line with the National Bank of Ukraine’s 2.1% forecast and independent projections from local thinktanks and investment banks, which range from 2% to 2.6%.

The projections reflect the fact that the Ukrainian government expects the war to continue through 2026, IMF European Department Director Alfred Kammer said during the presentation of the October 2025 Regional Economic Outlook for Europe.

The IMF’s updated 2025 forecasts further reflect two main factors: higher imports of critical goods needed for the war effort and increased household imports.

“Imports are projected to increase, both due to critical goods required for Ukraine’s war effort and because of rising household consumption amid a loss of competitiveness in the economy,” Kammer said during the briefing. 

Ukraine is seeking a second IMF loan because initial financing aimed at the end of hostilities is no longer relevant, as Russia drags its full-scale invasion of Ukraine into its fourth year. 

The size of that loan has not been formally discussed, but early estimates put it at about $8 billion, Bloomberg previously reported.

In March 2023, the IMF approved a four-year Extended Fund Facility program for Ukraine, worth around $15.6 billion.

The IMF added that Ukraine’s debt trajectory will continue to be reviewed under its current program. Its latest disbursement to Ukraine was made as planned, helping to prepare the country for the next phase of recovery and EU accession.

At the same time, Kammer emphasized the importance of Ukraine continuing its “determined reform efforts” in fighting corruption, improving governance, and strengthening institutions  – all crucial for preparing the country for post-war restructuring and EU accession.

“These structural reforms must be carried out,” Kammer said. “One part of the program also focuses on mobilizing domestic revenues. Donors are providing substantial support to Ukraine, but Ukraine must also support its own budget through determined efforts to raise revenue.”

Kammer praised the Ukrainian government’s approach, describing it as “very forward-looking.”

“The authorities have a clear vision that goes beyond this war and want to establish the right conditions for the structure of the economy, as well as for government and state institutions, to support the social spending that the population expects,” he said.

Previously, the IMF published its October 2025 World Economic Outlook (WEO) report, presented in Washington on Tuesday by IMF Chief Economist Pierre-Olivier Gourinchas. 

Alongside with revised 2% real GDP figures, the inflation outlook for Ukraine also remains broadly stable, with consumer prices projected to rise by 12.6% this year and 7.6% in 2026 (compared to 12.6% and 7.7% in the April WEO, respectively).

However, Ukraine’s current account balance projections have notably worsened — to a deficit of 16.5% of GDP this year and 12.6% next year, compared to 15.9% and 10.6% projected in April. 

The IMF estimates an unemployment rate of 11.5% to 11.6% for this year and 10.2% for 2026.

The IMF also puts Ukraine’s financing gap for 2026–2029 at $65 billion, a well-placed source told the Kyiv Post. 

The National Bank of Ukraine (NBU) projects $35 billion in external inflows in 2026 and $30 billion in 2027, but Deputy Governor Sergiy Nikolaychuk noted that funding sources remain unidentified for $12.7 billion in 2026 and $29 billion in 2027.

Ukraine expects $37.4 billion in international financing over the next two years, leaving a similar shortfall, the ministry said earlier. 

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